31st meeting of GST council held on 22nd December 2018 and government decided to give some relief to the common man by cutting rates for 23 items. Cinema lovers will have some smile on their face after reading this. List includes Television screens up to 32 inches, Retreaded tyres, power banks of lithium ion batteries, cinema tickets and few other items. These updates may come into effect from 01st January 2019. These rate reduction will have an overall impact on GST revenue of Rs. 5,500 crore, said Finance Minister.
“28% item is moving towards sunset only few items are left in 28% bracket” : Jaitely.
Here are the few items on which rates have been reduced.
Rate reduced from 28% to 18%
- Agricultural components, pulleys, cranks, transmission shafts, gear boxes, pulleys etc.
- TV screens and monitors up to screen size of 32 inches.
- Retreaded tyres
- Power bank of lithium ion batteries.
- Sports item like video games
- Digital cameras and recorders.
Rate reduced from 28% to 5%
- Accessories for the carriages for differently able persons.
Rate reduced on services
- On cinema tickets above Rs. 100 shall be reduced from Rs. 18% to 12% and on above Rs. 100 rates shall be reduced from 28% to 18%.
- GST on third party insurance premium of goods carrying vehicle rates to be reduced from 18% to 12%.
- GST on Air tickets for pilgrims from 18% to 5%.
- Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY) shall be exempted.
Apart from this on solar power generating equipments 5% rate has been proposed.
Few other important points from 31st GST Council meeting.
- Total compensation for last FY 2017-18 was distributed among states around 48000 crores. This year (FY 2018-19) it has been reduced to Rs. 30000 crore for first six months which is a good sign.
- Maharashtra, West Bengal, Bihar, north east & Southern states have shown significant improvement in GST revenue.
- Uttarakhand, Punjab, Himachal Pradesh & Puducherry were the worst performing states.
- Overall average monthly revenue of GST turnover has been increased from Rs.89,000 in FY 2017-18 to Rs.96,000 crore in FY 2018-19.
- Total 6 items have been removed from 28% bracket, now 28 items are left in 28% slab and many items and sub items are luxury and sin products.
- Refund process will be made easier.
- GST portal for return filing and payment will be made more simpler.
- Annual return for FY 2017-18 has been extended to 30th June 2019, earlier it was 31st December 2019.
- Creation of a centralised appellate authority for advance ruling to deal with cases of conflicting decisions by two or more states appellate advance ruling authorities on same issues.
- GST council approved amendments to Section 50 of the Central Goods and Services Tax Act, to charge interest to taxpayers for late payment of tax, only on net tax liability, adjusted for credits.
- Finance Minister announced that the composition scheme, that requires taxpayers to pay a flat GST rate, to be extended for service providers. At present, only restaurant owners with an annual turnover up to Rs 1.5 crore can avail the composition scheme.
- Finance minister also shared a fact that GST revenue from manufacturing sector has gone up, but from service sector it is opposite and he listed 4 reasons for that.
- Competition in telecom sector has brought GST revenue down.
- Excessive competition in airlines sector also has adversely impacted GST revenue.
- Slow growth in Real estate.
- Small service provider’s hesitation in joining the GST circle.
These new revised rates will for sure bring inflation down and will encourage consumer to buy more which will create a positive ripple effect on economy. Of course Much more need to be done but we are on right path so far.
Mr. Amit Singh has completed his B.Com from Delhi University and his M. Com from IGNOU, he is currently working in an MNC as finance manager. He Lives in Delhi. Big fan of Sachin Tenudulkar, love economics, accounts, dogs, food, books. He also like writing on several topics mostly finance and current affairs as it interest him the most. Love to make friends and love to have healthy discussions and debate on social platforms on several current affair or educational topics. He has 11 years of vast experience in finance and accounts field. He also investing in share market from last 10 years. You can share yours ideas, write or feedback to me on my official email id i.e firstname.lastname@example.org